MetLife Investment Management and Loews Hotels & Resorts have put their Hollywood hotel up for sale — with a steeply discounted price tag.
The firms have listed the Loews Hollywood Hotel with a guiding price of $125 million — about $40 million less than what Loews paid for the property in 2012, according to Green Street’s Real Estate Alert. The guidance price comes out to about $200,000 per room.
MetLife, which formed a joint venture with Loews in 2012 and holds a 50 percent stake in the hotel, did not respond to a request for comment. Eastdil Secured holds the listing.
The 625-key hotel, which sits on the edge of Ovation Hollywood, a shopping mall formerly known as Hollywood and Highland, is pitched as a redevelopment opportunity — or a chance for a new brand to take over.
After Loews and MetLife bought the property at 1755 Highland Avenue, the duo planned a $26 million renovation of the hotel.
In 2021, Loews and MetLife scored $91 million from Värde Partners, an alternative investment firm, to refinance the 625-key hotel, replacing debt from HSBC, records show. That debt was then packaged into a collateralized loan obligation deal.
At $125 million, the deal would be well below replacement cost, according to Alan Reay, who runs the brokerage Atlas Hospitality Group.
In the 1990s, developer TrizecHahn spent more than that to renovate and expand the hotel.
In the first six months of this year, 16 hotels across Los Angeles County sold, with a total dollar volume of $212.5 million, according to Atlas Hospitality data. That’s down nearly 80 percent compared to the 17 hotels that traded for a total of $1 billion in the first half of 2023.
Interest rates and the cCity of Los Angeles’ transfer taxes on commercial sales have both hampered deals.
While Loews is looking to offload its Hollywood assets, it’s investing in others across the country. In Dallas-Fort Worth, the hotel firm is looking to redevelop the 311-room Sheraton Arlington Hotel at an estimated cost of $410 million. Loews would provide equity and debt finance for the project.
In Miami, Loews recently refinanced its oceanfront Miami Beach hotel with a $305 million loan that was packaged into a commercial mortgage-backed securities deal.